CSSC capitalizes on OTC to expand its offshore businesses

More than 10 subsidiaries of China State Shipbuilding Corporation (CSSC) will attend the Offshore Technology Conference (OTC) next week from May 5-8 in Houston to expand the company's business in the offshore sector.

Started in 1969, OTC has become the world's foremost event for the development of offshore resources in the fields of drilling, exploration, production and environmental protection. OTC is held annually in Houston.

"OTC is like a club for all offshore businesses. If you want to play in offshore, you must attend OTC," said Chen Weimin, CSSC's offshore business director in Houston.

CSSC has more than 60 enterprises and institutions under its umbrella, and is a major player in shipbuilding in the world. In recent years, CSSC has expanded into offshore oil and gas development and transportation sector.

CSSC has been participating in OTC since 2005. Chen said the conference provides the best opportunity to build a business network and visit key customers because a majority of offshore enterprises worldwide attend the event and most companies send their key decision makers to it.

"Almost all exhibition booths will have a vice-president by its side. Besides the exhibition itself, many more important activities happen outside of the OTC exhibition hall with receptions and meetings between the business people. After OTC is over, at least a month will be spent to do follow-up meetings with relations cultivated during OTC. OTC is the best time to meet most people you would otherwise have a hard time to get hold of," Chen explained.

During the 2013 OTC, CSSC hosted the "China Arena" forum with China's major energy players CNPC, Sinopec and CNOOC presenting the country's offshore capabilities to the world.

This year, more than 40 CSSC representatives will attend, with many of them high-level officials and key personnel in technology and sales from various company enterprises.

CSSC's attendee list represents the enterprises doing offshore business: China Shipbuilding Trading Co Ltd; Shanghai Waigaoqiao Shipyard; Hudong Zhonghua Shipyard; Shanghai Shipyard; JiangNan Shipyard; Guangzhou Shipyard International; Huangpu Shipyard; Guangzhou Chengxi Shipyard; CSSC Marine Power; South China Marine Machinery; and design institutes MARIC, SDARI, STRI and GUMECO.

Chen has organized a CSSC offshore promotional reception on May 4, a day before OTC opens at Houston's Reliant Park. "By doing this reception, I hope to gather CSSC's offshore enterprises together, integrate our offshore forces and provide a stepping stone for them to gain entrance into the offshore market," he said.

CSSC has benefited from participation in OTC, Chen said.

"The breakthrough for CSSC's offshore orders started in 2011 with $500-600 million orders. In 2013, CSSC's new book had increased to $2.4 billion in the offshore sector," Chen said. It's a relatively small portion of 15 percent of CSSC's overall annual revenue of $15.8 billion, "but it accounts for a significant portion - 30 percent to 50 percent - for some individual enterprises and it's a fast growing revenue source for CSSC."

"One of our major focuses will be promoting the jackup drilling rig, and Waigaoqiao Shipyard has already gotten 11 orders for it since 2012, and the total order for CSSC is 13," he said. A jackup is a mobile offshore (oil) drilling unit that sits on a floating barge and holds the oil rig on a platform above the water.

To put those numbers into perspective, Chen explained that every year the total order of jackups in the world is more than 100 and half of them are taken by various Chinese companies.

Other CSSC products to be shown at the conference include floating production storage offloading (FPSO) and a drill ship.

CSSC is capable of providing a complete offshore production line, from upstream to downstream, in offshore oil and gas development, Chen said.

"From exploration, building of drill ship to production and transportation, CSSC has it all," he said.

mayzhou@chinadailyusa.com